Video 5:00
Trade deal with Japan

Australia and Japan have reached a Free Trade Agreement which will slash tariffs on Australian beef, dairy products, sugar and fruit and vegetables.

Transcript

EMMA ALBERICI, PRESENTER: The so-called "cars and cows" agreement with Japan is a done deal tonight, with Tony Abbott and his Japanese counterpart having struck a trade deal seven years in the making.

There's also been a decision to begin talks on closer Defence ties.

The Government is calling it an historic agreement, but the Opposition says it will work through the fine print before giving it the thumbs up.

From Canberra, political correspondent Tom Iggulden has more.

TOM IGGULDEN, REPORTER: Tony Abbott's been accorded the highest respect in Tokyo, meeting the Japanese Emperor and enjoying lots of face time with Prime Minister Shinzo Abe.

TONY ABBOTT, PRIME MINISTER: There is serendipity in the fact that we are talking together at the time of the cherry blossoms.

TOM IGGULDEN: The symbolism over, tonight came the substance.

TONY ABBOTT: This is the first time that Japan has negotiated a comprehensive economic partnership agreement, or free trade agreement, with a major economy, particularly a major economy with a strong agricultural sector.

TOM IGGULDEN: On the Australian side, beef is the big winner. A hefty 38.5 per cent Japanese tariff now applies. That'll be cut in half for frozen beef over 15 years and by more than a third for fresh beef over 18 years. The expected benefit runs into the billions.

ANDREW ROBB, TRADE MINISTER: So there'll be a massive advantage. Almost half the cut occurs in the first two years, which will give our beef industry the jump on every other beef exporter in the world.

TOM IGGULDEN: There's also significant advantages for other agricultural products - fruit and vegetables, seafood, sugar, cheese and wine among the winners. Tariffs will remain on rice though, with its special cultural significance to Japan.

Japanese exporters will see Australian tariffs lowered on electronics, white goods and cars. Australian consumers will see prices fall as a result.

The last trade deal between Australia and Japan was in 1957, struck between the Liberal Party's godfather, Bob Menzies, and Shinzo Abe's grandfather, Prime Minister Kishi.

TONY ABBOTT: I think that today could be equally historic and equally significant.

TOM IGGULDEN: By his own admission, that's a big call from the Australian Prime Minister.

TONY ABBOTT: But for the opening that was established then, but for the trust which swiftly developed from that time, there would be no iron ore industry as we know it in Australia, there would be no coal industry as we know it in Australia.

TOM IGGULDEN: Reaching agreement with Tokyo's taken seven years through two changes of government in Australia and into Shinzo Abe's second go-round as Japanese Prime Minister.

The complicated trade negotiations are shaping up as good practise for Tony Abbott when it comes to his dealings with the new Australian Senate, come July.

Strong showings from the Palmer United and the Greens in the WA Senate election have revived comparisons between the crossbench and the alien bar scene from the classic sci-fi movie Star Wars.

NICK XENOPHON, INDEPENDENT SENATOR: The Ewoks and the Rebels managed to work together in the end, so I'm hoping that will be the way it'll work.

TOM IGGULDEN: The Government's already asking for Clive Palmer's forgiveness after accusing him of using his money to buy a Senate seat.

ERIC ABETZ, EMPLOYMENT MINISTER: What I would invite people to do is not to take recriminations against each other because of the campaign.

JASON CLARE, OPPOSITION COMMUNICATIONS SPOKESMAN: I think we'll see a bit of Palmer karma as Tony Abbott finds out exactly what it means if you attack Clive Palmer.

TOM IGGULDEN: With his position significantly strengthened in the Senate, Mr Palmer's showing he'll bargain hard on Government priorities like paid parental leave ...

CLIVE PALMER, PALMER UNITED PARTY: Maybe the women that are earning the less need the more money and the women earning more need less.

TOM IGGULDEN: ... and changes to the Racial Discrimination Act.

CLIVE PALMER: There may be some problems with one or two words of it. We'll have to have a look at that. But we're not in favour of what Mr Brandis has said.

TOM IGGULDEN: The blood-letting after Labor's poor performance is showing no sign of letting up.

MARK BISHOP, LABOR SENATOR (AM, ABC Radio): The mining tax, the carbon tax have been an ongoing problem for the last five years.

TOM IGGULDEN: Retiring Senator Mark Bishop voted to keep the mining tax last month, but now says it's time for Labor to abandon support for it.

MARK BISHOP (AM, ABC Radio): Why on God's green Earth we defend a failed tax that doesn't raise money I will never understand.

TOM IGGULDEN: On that, the Government agrees.

ERIC ABETZ: I think Mark Bishop is right. They got punished like never before in a by-election and I think that should send a message to Bill Shorten.

TOM IGGULDEN: Labor's not just divided on policy. Joe Bullock's a right-wing union heavy with a criminal record and a disdain for Labor's rank and file and he's headed for Canberra. Little wonder some in the party are again calling for a rethink of links with the union movement.